Tag: duty of confidentiality
The facts of the case serve to highlight the importance of maintaining a continuing professional standard in dealings with clients. More importantly, an awareness of the duty of loyalty owed to the client, especially where there has been a termination of a retainer and emotions may be running high.
The claim is centered around the Last Will and Testament of Budd Kuehl, the father of two of the plaintiffs, a mortgage transaction that intertwined with his estate, and communications made by the defendant in the course of her retainer and after the termination of said retainer.
In 2010, shortly before the father’s death, he had retained the defendant and her firm to draft a new Will. At the same time, the defendant also acted in a mortgage transaction for the daughter on her home. The father jointly applied for the mortgage with his daughter and it was arranged by the defendant for him to have a 50% interest in the mortgaged home as a tenant in common, pursuant to requirements of the mortgagee.
The 2010 Will provided for the estate to be held in trust for the benefit of the surviving spouse during her lifetime, and subsequent to her passing, for the residue to be divided equally between the father’s children, subject to the condition that each child’s share would first be applied to pay off any mortgages they held.
The defendant had been retained by the estate trustee to assist with administrative matters. However, over the course of her retainer, disputes arose between the defendant and the daughter concerning the amounts owed, if any, relating to the mortgage on the daughter’s home and her father’s ownership interest in it. The plaintiffs, in their capacity as estate trustees and executors, terminated the defendant’s retainer.
After her retainer was terminated, the defendant communicated with the Office of the Public Guardian and Trustee (the “OPGT”) concerning the father’s surviving spouse. These communications formed the core of the claim of defamation, as they resulted in the OPGT refusing to accept the daughter’s application for guardianship of her mother. The court agreed with the plaintiffs that these communications were defamatory in nature, the defendant’s claims of qualified privilege notwithstanding.
The facts of this case are a sober warning to lawyers who act for multiple related parties, to ensure clear communication of the rights and liabilities of each party and how they may overlap. Where a breakdown of the lawyer-client relationship does occur, the duty of loyalty and confidentiality to the client should be given exceptional attention.
Thank you for reading and have a great day!
Ian Hull & Raphael Leitz
The notes and records of the lawyer who assisted the deceased with their estate planning can play an important role in any estate litigation. As a result, it is not uncommon for a drafting lawyer to receive a request from individuals involved in estate litigation to provide them with a copy of their notes and files relating to the deceased’s estate planning. But can the lawyer comply with such a request?
The central concern involved for the lawyer is the duty of confidentiality which they owe to the deceased. This duty of confidentiality is codified by rule 3.3-1 of the Law Society of Ontario’s Rules of Professional Conduct, which provides:
“A lawyer at all times shall hold in strict confidence all information concerning the business and affairs of the client acquired in the course of the professional relationship and shall not divulge any such information unless expressly or impliedly authorized by the client or required by law to do so.”
The duty of confidentiality and privilege which is owed to the deceased by the lawyer survives the deceased’s death. This was confirmed by the court in Hicks Estate v. Hicks,  O.J. No. 1426, where, in citing the English authority of Bullivant v. A.G. Victoria,  A.C. 196, it was confirmed that privilege and the duty of confidentiality survive death, and continues to be owed from the lawyer to the deceased. With respect to the question of who may waive privilege on behalf of the deceased following their death, Hicks Estate v. Hicks confirmed that such a power falls to the Estate Trustee under normal circumstances, stating:
“It is clear, therefore, that privilege reposes in the personal representative of the deceased client who in this case is the plaintiff, the administrator of the estate of Mildred Hicks. The plaintiff can waive the privilege and call for disclosure of any material that the client, if living, would have been entitled to from the two solicitors.”
Simply put, the Estate Trustee may step into the shoes of the deceased individual and compel the release of the lawyer’s file to the same extent that the deceased individual could have during their lifetime.
In circumstances in which the validity of the Will has been challenged, the authority of the Estate Trustee is also being challenged by implication, as their authority to act as Estate Trustee is derived from the Will itself. In such circumstances, the named Estate Trustee may arguably no longer waive privilege and/or the duty of confidentiality on behalf of the deceased individual. Should the notes and/or records of the drafting lawyer still be required, a court order is often required waiving privilege and/or the duty of confidentiality before they may be produced.
Whether or not a lawyer can release their file following the death of a client will depend on the nature of the dispute in which such a request is being made, and who is making the request. If there is a challenge to the validity of the Will or the Estate Trustee’s authority, it is likely that a court Order will be required before the lawyer may produce their file regardless of who is requesting the file. If the dispute does not question the Estate Trustee’s authority, such as an Application for support under Part V of the Succession Law Reform Act, the lawyer should comply with the request to release their file so long as the requesting party is the Estate Trustee. If the requesting party is not the Estate Trustee, and the Estate Trustee should refuse to provide the lawyer with their authorization to release the file, matters become more complicated, and may require a court Order before the lawyer may release their file.
Thank you for reading.
It is trite law that an executor administering a deceased persons’ estate has an obligation to account to the beneficiaries. The law is a bit more complex when an attorney for property is applying to the court to account for his/her administration of an incapable person’s affairs.
Rule 74.18(3) of the Rules of Civil Procedure provides that service of the application material is required on persons who have “a contingent or vested interest in the estate”. Because a will speaks as if it was made immediately prior to the death of a testator, a beneficiary has no financial interest until the testator dies, the result being that in an accounting for the administration of the assets of an incapable person, only the incapable person him/herself has a contingent or vested interest in the assets.
Although it may seem inadequate that an attorney would be required to serve the grantor and no other family members, as an incapable person will arguably not have the wherewithal to level objections in respect of the administration, keep in mind that the welfare of the grantor is already being safeguarded by the Public Guardian and Trustee (who must also be served with the court material) and a litigation guardian who may be appointed within the context of the accounting application to protect the interests of the grantor.
Couple the above with the strict duty of confidentiality and privacy owed to an incapable person by the attorney, as set out in the Substitute Decisions Act, 1992 (Regulation 100/96), and we have a protective framework when dealing with disclosure of financial affairs of living persons.
This makes total sense to me. However, it may come as an unwelcome surprise to an adult child who, for instance, learns that she does not have an automatic right to receive disclosure of her incapable parents’ finances. Feeling unfairly shut out, she may consider seeking the court’s assistance.
Although she can apply to the court for leave to compel an accounting, the prevailing view of the court is that a person’s privacy is paramount such that leave should be granted sparingly. In a prior blog on the subject, my colleague Umair Abdul Qadir cited the Groh v Steele decision, where the Court makes an important pronouncement on this point, stressing that leave should not be granted absent the applicant establishing an interest (at least indirectly) in the affairs of the grantor, and some evidence that the attorney is not properly handling the administration.
Thanks for reading and have a great day,
Some other blog posts on this and related subjects that may appeal to you are: